Are you thinking about where to put your money? According to the latest report by the Post Office, two-thirds of over 50s are unaware of the favourable ISA changes that will take effect from the 6th of October. The government is offering the elderly population a unique opportunity to top-up their tax-free savings from next month. From the 6th of October anyone over the age of 50 will be eligible to boost their current annual limit to £10,200, which is an increase of £3,000.

This increase could potentially benefit around 21 million individuals living in the UK. Currently, individuals are allowed to invest up to £3,600 in the cash element of the ISA, however under the new rule, starting in October anyone over 50 will be allowed to invest up to a maximum of £5,100. All other savers will be able to take advantage of this increased allowance from April 2010.

However, savers who have their cash ready on the 6th of October may be in for a bit of a shock as many financial institutions are restricting the uptake for many of their products. According to reports, many companies are charging heavy penalties for savers to put their money into accounts which offer higher rates of return, in some cases the charges are so high that it will cancel out all of the interest accrued during the year.

This move rather than benefiting the elderly could in fact go against many and reduce the uptake of the government’s offer. This is a real shame as around 9 million of the 11 million UK pensioners rely on the interest earned by their savings to live. It looks like, despite government effort, savers have been hit once again.